Overview of Company Registration in Switzerland
The Swiss taxation system, legislative order, and financial and economic systems have been the standard for the whole world, and consequently, the service of registration of companies in Switzerland is prevalent among non-residents. The process of business registration in the territory of Switzerland isn't time-consuming but involves certain legal complexities.
The objectives of registering a company in Switzerland are ascertained by the founder, and the selection of the organizational and legal form must be made using the support of the specialists in this matter. A number of prerequisites are imposed on both registration of an offshore company in Switzerland and its further activities depending on the form of incorporation. Switzerland consists of 26 cantons; each has its own legislation regarding the establishment of new companies.
Benefits of Company Registration in Switzerland
Registering a company in Switzerland can be beneficial due to the following reasons
- The entrepreneur has access to the highest-quality banking services
- Generation of Revenue by offering logistics and transportation services
- The opportunity of trading freely with European or American states.
- A supportive destination for establishing a Fintech start-up
- It is a crypto-friendly country.
- It is one of the more open and business-friendly economies in the world, and its government focuses on encouraging international direct investments (FDI) as well as R&D.
- The banking laws, particularly the rules on banking secrecy in Switzerland, provide great protection to foreign businessmen and investors.
- The country is highly developed in respect of infrastructure and research direction offering the company the most modern facilities to foster its growth companies.
- It has headquarters of several international companies and businesses which has earned it its reputation as a place of security and stability over the long term.
Types of Entities for Company Registration in Switzerland
An entrepreneur can choose from the following entities for registering a company in Switzerland
The sole proprietorship business in Switzerland is managed by one individual (known as a sole proprietor) who is fully liable for all liability. The name of the sole proprietor must be listed in the company. Additionally, the sole proprietor must be a Swiss resident. The sole proprietor shall be the sole recipient of the profits and is also personally accountable for the company's obligations and debts. If the annual revenue for a sole-proprietorship>CHF 100,000, it must be registered by the Chamber of Commerce in Switzerland.
A general partnership within Switzerland is a business owned by two or more partners having unlimited liability. Partners must be Swiss citizens. A general partnership must be mandatorily enrolled at the Chamber of Commerce.
The concept of a Limited partnership within Switzerland is similar to that of general partnerships, except in this case, the general partners have unlimited liability, whereas the other partners (limited partners) are responsible for the company to a certain amount.
Limited Liability Company (GmBH)
The term “Limited Liability Company” refers to an LLC with limited liability established with a minimum of two shareholders. The shareholders of an LLC aren’t liable for the obligations or debts of the company in a personal capacity. The minimum amount of CHF 20,000 equity is required for forming an LLC.
Joint Stock Company
Switzerland company registration for a joint-stock company can be registered with a minimum of three shareholders along with an initial capital requirement of CHF100,000. Every shareholder is limited to the amount of contribution made by them to the capital investment. Joint stock companies operate as autonomous legal entities and have a board of majorly Swiss and European citizens.
Public Shareholding Company
A publicly-owned shareholding corporation is the most well-known and widely used legal entity in Switzerland and is formed for the primary reason of the acquisition and management of the participation of other companies. A minimum capital investment of CHF100,000,00 is required for registering this type of company
A subsidiary is a legally-independent company affiliated with an entity from another country. It operates as a Swiss company and can be a limited liability company or corporation.
A foreign company can establish a subsidiary office within Switzerland for increasing the range of its products or services within the country. The parent company of the foreign entity is responsible for the cost of the branch; however, because a branch office falls under Swiss laws, it shall be classified as a Swiss company.
A Representative office situated in Switzerland can be best understood as an organization that’s formed for serving non-commercial needs. It is designed for businesses intending to expand their market reach for research and other marketing activities.
Eligibility Criteria for Company Registration in Switzerland
The applicant must fulfil the following eligibility criteria for company registration in Switzerland
- A minimum of 1 shareholder
- Minimum 1 director.
- Directors and shareholders can be the same person.
- There is a need for directors who are local or resident to run a Swiss Company.
- 100% foreign or local shares are also allowed.
- The required minimum capital contribution for registration of an LLC is CHF 20,000.
- A registered office address in the local area is mandatory.
- It is mandatory to choose an official of the company as a Secretary.
- The firm owners don't need to be present in person throughout the process of company registration in Switzerland. However, banks in Switzerland require the presence of the proprietors of the company at the moment of opening a new account for the due diligence process.
Necessary papers Required for Company Registration in Switzerland
- Articles of Association
- Specimen signatures& of the& managing board& (company’s secretary, directors, and company’s shareholders/founders);
- Stampa Declaration Form and& Lex Friedrich Declaration Form&
- Details on the registered address of the firm.
- Details of Social capital and the business, along with the primary objectives of the activities that will be managed by the legal entity that will be created;
- Additional papers may be required to be submitted, depending upon the& type of& company that is registered.
Procedure for Company Registration in Switzerland
The procedure for company registration in Switzerland is briefly explained below.
Selection of the Type of Company
The first step is the selection of the type of business entity best suited as per the preferences of the entrepreneurs
Name Reservation and Trademark Registration
Once the applicant has chosen the type of company, he shall also choose a unique name for the company and get it reserved, followed by the registration of the trademark of the company to ensure the originality of the symbol/ mark.
Opening of Corporate Bank Account
The next step is to open a corporate bank account for carrying out the operations of the company.
Preparation of Essential necessary papers
After opening the corporate bank account, the applicant must prepare the essential necessary papers such as the drafting of MOA and AOA and the incorporation deed
Signing and Notarization of the necessary papers
Once the requisite necessary papers are drafted, the applicant must sign the same and get it notarized with the official notary public in Switzerland.
Filing out the Essential Forms
The applicant must fill out the Stampa Declaration Form and the Lex Friedrich Declaration Form.
Submission of the necessary papers
Subsequent to the drafting of the relevant necessary papers and filling out the essential forms, the applicant must submit the same to the Swiss Trade Register to complete the registration process.
Taxes in Switzerland
Resident companies must pay a Swiss corporate income tax (CIT) on their taxable profits earned in Switzerland, which is levied at the federal, cantonal, and communal levels. The CIT at Federal Level is 8.5% on profit after tax.
Generally, the overall approximate value of the maximum CIT rate on profit prior to tax for federal, communal and cantonal taxes is between 11.9% and 21.0%, based on the locations of the corporate office of the company at a specific capital of a canton in Switzerland.
Accounting and Auditing Requirements
An audit is mandatory for the PIEs and companies exceeding 2 of the 3 following thresholds
- CHF 20 million of total assets
- CHF 40 million of total revenue
- 250 employees. Companies below the specified thresholds must conduct limited statutory examination (a moderate assurance engagement), a stand-alone Swiss review standard has been formed for the same.